Hydropower Expansion

[ GWh of Electricity Added: ]

38.1K

[ Jobs Impact: ]

Low

Medium

High

[ Budget Impact:]

Low

Medium

High

[ Conventional Pollutants Reduced: ]

SO2

5011

NOx

4137

Hg

.067

PM

768

[ Megatons of GHG Reduced: ]

36.7

Overview

Mention hydropower and most people immediately think of enormous, New Deal-era projects like the Grand Cooley or Hoover Dams. These installations are iconic, but they are not the entire story. Hydropower currently generates 6.8%1 of the electricity used by the United States, but we are not yet using the full potential of our domestic hydro resources. By modernizing some existing large hydropower producers and equipping some other dams with electricity generation turbines, we could add more than 8 GW of new clean electric capacity to the grid.

Analysis

Conventional hydropower is generated by dams and pump storage, and while the bulk of it is located in the Pacific Northwest and West, much of the nation benefits from hydropower.2 Existing installations collectively provide 101 GW3 of generation capacity. But there is much more power available without erecting any new dams.4 While we obviously cannot install turbines on all 50,000 of our nation’s unpowered dams,5 the Bureau of Reclamation (USBR) has identified 100 large dams that could generate significant amounts of hydropower.6 The U.S. could add a total of 8.225 GW of hydro-electric capacity by adding electricity generation capacity to those 100 dams and increasing the efficiency of turbines at existing facilities.7 That would be enough to power at least 6.2 million homes,10 more than in the states of Missouri, Louisiana, and Iowa combined.11

Assuming this new hydropower replaced coal, it would displace 31 million metric tons of annual greenhouse gas emissions.12 And hydropower produces no conventional pollutants, so it would remove as much nitrogen and sulfur oxides, mercury, and particulate matter as produced by about 13 average-size coal plants.13 These new hydro projects would also create as many as 48,000 additional jobs.14 Most of these new positions would be in the Southeast and the Midwest.15 Based on analysis of data compiled by the Idaho National Laboratory, the Midwest and South currently rely on only about 1 GW of hydropower capacity.16 This would be a substantial broadening of electricity resources for these regions.

The cost of hydro is competitive with other energy sources aside
from natural gas at its current price. Levelized costs of hydro projects are expected to remain generally low, at $88.9 per MWh for the foreseeable future, compared to $110.9 per MWh for advanced coal (without CCS), $111.4 per MWh for advanced nuclear, and $66.1 per MWh for advanced combined cycle natural gas.17 Once built, hydropower needs no feed stock fuel unlike coal, natural gas, or nuclear, making it the cheapest source of baseload power to produce.18

Implementation

Congress and the Administration should develop strategies to ensure facilities are modernized and use more efficient technologies, and certain unpowered dams should be electrified to provide power to underserved regions in the Midwest and South.

Modernize Sites Identified by the Bureau of Reclamation

According to the USBR, there are 70 existing hydro-electric sites that could be modernized at low cost and produce over 1 million MWh of electricity per year from just over 225 MW of installed capacity.19 Undertaking all of these named projects would only require around $591 million in total funding.20 Fourteen states would benefit from these 70 projects, including New Mexico, Nebraska, Colorado, and Arizona. USBR could achieve these gains simply by reprogramming funds already appropriated to the agency, or Congress could make additional appropriations available for these projects.

Electrify Unpowered Dams

The 50,000 unpowered dams waste all of the kinetic energy of the water they manage. While more than 12 GW of electricity could be captured if all of the dams were rigged to produce electricity, most of these would produce little power. However, just 100 of those dams along the Ohio, Mississippi, Alabama, and Arkansas rivers could produce around 8 GW of power for the South and Midwest. While there would be significant cost to electrify these 100 dams, there is significant private interest in financing these facilities,21 and they would create around 48,000 jobs.22 Moreover, the most difficult and costly work—building the dam—is already done. As Oak Ridge National Laboratory has noted, “many of the monetary costs and environmental impacts of dam construction have already been incurred at non-powered dams.”23

The federal Army Corps of Engineers (USACE) owns 81 of these 100 dams; utilities and other entities own the rest.24 Congress should consider reforms to facilitate the development of non-federal hydroelectric power at USACE civil works projects. These regulatory reforms would be low cost to taxpayers but would result in the removal of significant red tape that is holding back private development of new generation capacity at non-powered dams. Currently language drafted by the Hydropower Policy Review Working Group25 is circulating amongst policymakers in Washington and has the support of environmental and industry groups alike.

Reform the Hydroelectric Licensing Process

The licensing of hydroelectric projects has generally become lengthy, costly, redundant, and inefficient, leading to costly delays in the electrification or modernization of hydroelectric systems. Congress should pass licensing reform that would make the process more timely and result in greater government accountability while preserving environmental reviews that protect public and environmental health. This should include improved coordination between Federal and State environmental laws, improved Federal and State agency coordination and transparency in the licensing process, and clearer definition of the authorities of Federal agencies to maximize participation during the hydropower licensing process.

Expedite Pumped Hydro Storage Licensing

FERC should create a separate, expedited licensing track for closed-loop pumped hydro storage projects (those not connected to an existing waterway). The Commission currently is soliciting pilot projects to test such an approach.26 In the past three years, FERC has issued preliminary permits for nearly 50 GW of pumped hydro storage, possibly signaling a pumped hydro renaissance that could triple total U.S. capacity.27 However, preliminary permits mostly secure applicants a place in line for the licensing process, which can take five years. This timeline serves as a deterrent for energy developers, who might forgo pumped hydro storage in favor of different energy asset projects that don’t need FERC approval.28 But because two-thirds of these new pumped hydro projects are closed-loop,29 they carry fewer environmental impacts than ordinary projects. Hence, their licensing process could—and should—be much shorter.

United States, Department of Energy, Oakridge National Laboratory (ORNL) “An Assessment of Energy Potential at Non-Powered Dams in the United States,” Report, Appendix A, April 2012. Accessed March 4, 2013. Available at: http://www1.eere.energy.gov/water/pdfs/npd_report.pdf.

Based on analysis of findings in reports issued by Bureau of Reclamation and Oakridge National Laboratory. See United States, Department of the Interior, Bureau of Reclamation, “Resource Assessment List of 70 Sites with Potential for Additional Hydropower,” Report. Accessed May 18, 2012. Available at: http://www.usbr.gov/power/AssessmentReport/Assessmentlistof70sitesbystate.pdf; See also “An Assessment of Energy Potential at Non-Powered Dams in the United States,” Appendix A.

Each of the listed projects has a positive benefit cost ratio, most of which are greater than 1.00. The benefit cost ratio compares the present value of benefits during the period of analysis to the present value of costs. A score of over 1.00 means the value of quantifiable benefits exceeds the cost of undertaking the project.

According to the Electric Power Supply Association, 1 MW of electricity is enough to power 750–1,000 homes. So 8.226 GW can power between 6.2 million and 8.2 million homes. Electric Power Supply Association (EPSA), “Electricity Primer: The Basics of Power and Wholesale Markets,” Accessed May 14, 2012. Available at: http://www.epsa.org/industry/primer/?fa=wholesaleMarket.

Housing unit figures based on 2010 census data. See United States, Department of Commerce, U.S. Census Bureau, “State & County QuickFacts.” Accessed May 14, 2012. Available at: http://quickfacts.census.gov/qfd/index.html.

Calculations based on data from the Energy Information Administration on capacity factor of energy, and peer reviewed analysis of GHG output by energy source. Analysis based on coal plant emissions data and environmental impact assessments available through the Department of Energy’s National Energy Technology Laboratory. See United States, Department of Energy, Energy Information Administration, “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012,” Report, Table 1, July 12, 2012.Accessed March 4, 2013. Available at: http://www.eia.gov/forecasts/aeo/electricity_generation.cfm; See also, Benjamin Sovacool, “Valuing Greenhouse Gas Emissions from Nuclear Power: A Critical Survey,” Article, Energy Policy, June 2, 2008, p. 2950. Print.

Analysis based on conventional pollutants of a 550 MW subcritical bituminous pulverized coal plant, assumed to be average size for the PowerBook. See United States, Department of Energy, National Energy Technology Laboratory, “Subcritical Pulverized Bituminous Coal Plant,” Report. Accessed March 4, 2013. Available at: http://www.netl.doe.gov/KMD/cds/disk50/PC%20Plant%20Case_Subcritical_051507.pdf.

The hydropower industry employs between 200,000 and 300,000 full-time equivalent workers today to maintain its fleet. Based on prevailing jobs data for the hydro industry, hydro adds about 6 jobs per MW of installed capacity, which would add approximately 49,000 jobs for the 8.26GW added to the grid. See “Job Creation Opportunities in Hydropower,” Report, Navigant Consulting, September 20, 2009, p. 51. Accessed May 14, 2012. Available at: http://hydro.org/wp-content/uploads/2010/12/NHA_JobsStudy_FinalReport.pdf.

Based on the site locations most likely to be powered. See “Resource Assessment List of 70 Sites with Potential for Additional Hydropower.”

The Midwest is defined so as to include Wisconsin, Michigan, Indiana, Ohio, Illinois, Missouri, Iowa, and Minnesota. The South is defined so as to include Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas, Tennessee, and Kentucky. See United States, Department of Energy, Idaho National Laboratory, “State Resource Assessment Reports,” Report, December 5, 2006. Accessed May 14, 2012. Available at: http://hydropower.inl.gov/resourceassessment/states.shtml.

Operating and management costs for hydro is between $7.00 and $10.00 per MWh. See United States, Department of Energy, Idaho National Laboratory, “Hydropower: Plant Costs and Production Expenses,” July 18, 2005. Accessed May 14, 2012. Available at: http://hydropower.inel.gov/hydrofacts/plant_costs.shtml; See also “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012,” Table 1.

Based on conversations and draft documents generated by the Hydropower Policy Review Working Group, a broad coalition of stakeholders seeking to forge a common-ground approach between the environmental community and hydropower industry. Members include Third Way, industry, conservation groups, environmental organizations, clean tech companies, and NGOs.

United States, Department of Energy, Oak Ridge National Laboratory, “An Assessment of Energy Potential at Non-Powered Dams in the United States,” Report, p. vii, April 2012. Accessed September 23, 2014. Available at: http://www1.eere.energy.gov/water/pdfs/npd_report.pdf
.

“An Assessment of Energy Potential at Non-Powered Dams in the United States,” p. vii.

The Hydropower Policy Review Working Group, is a broad coalition of stakeholders seeking to forge a common-ground approach between the environmental community and hydropower industry. Members include Third Way, industry, conservation groups, environmental organizations, clean tech companies, and NGOs.

Implementation

How to Use the PowerBook

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SECTORS

The PowerBook is divided into five economic sectors: power, transmission, buildings and efficiency, industry, and transportation. Each sector includes multiple components, which are specific elements of that sector that require some policy change. Components that impact multiple sectors, such as clean energy finance or regulatory reform, are included in a sixth cross-sector section.

COMPONENTS

Each component has three parts: a short overview, an analysis of the challenges and opportunities for energy, employment, and the environment, and an implementation section that outlines specific actions that Congress, the administration, or the independent regulatory agencies can take. The policy recommendations in the implementation section are intended to serve as frameworks for more detailed legislation or regulatory reform proposals.

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OUR ANALYSIS

The PowerBook provides both pragmatic ideas to move America toward cleaner energy and data showing the potential impacts that these policies could have on our energy systems and economy. By combining several datasets, from economy-wide to industry-specific, we have developed a basic methodology for each component to estimate the effects these policies would have on CO2, conventional pollutants, and domestic energy needs. While future, independent modeling will provide higher accuracy, the current metrics offer a general barometer of impact and a way to compare the effects of various components.